1. In a machine-intensive production environment, the most accurate cost driver
ID: 342135 • Letter: 1
Question
1.
In a machine-intensive production environment, the most accurate cost driver of manufacturing overhead costs is usually ________.
Select one:
A. machine hours
B. direct labor costs
C. direct labor hours
D. direct materials used
2.
The Assembly Department of Interface, Inc., manufacturer of computers, had 4500 units of beginning inventory in September, and 8000 units were transferred to it from the Production Department. The Assembly Department completed 4000 units during the month and transferred them to the Packaging Department. The weighted-average method is used. Calculate the total number of units to account for by the Assembly Department.
Select one:
A. 8000 units
B. 12,500 units
C. 4500 units
D. 3500 units
3.
Unit product cost calculations using absorption costing do NOT include ________.
Select one:
A. fixed manufacturing overhead
B. variable manufacturing overhead
C. direct materials
D. variable selling and administrative costs
4.
The following information has been provided by Crosby Corporation:
The beginning balance of Work-in-Process Inventory account was ________.
Select one:
A. $5000
B. $21,000
C. $4500
D. $9400
5.
Castillo Corporation, a manufacturer, reports costs for the year as follows:
How much is the total period costs for Castillo?
Select one:
A. $735,000
B. $510,000
C. $26,000
D. $700,000
6.
Managerial accounting includes the planning function. Which of the following items would be part of the planning function of a business's managerial accounting?
Select one:
A. monitoring operations to keep the company on track
B. comparing actual to expected results
C. monitoring and evaluating the results of operations
D. choosing goals and deciding how to achieve them
7.
Locklear, Inc. reports the following information for the year ended December 31:
The operating income calculated using variable costing and absorption costing amounted to $10,000 and $12,700, respectively. There were no beginning inventories. Determine the total fixed manufacturing overhead that will be expensed under absorption costing for the year.
Select one:
A. $30,380
B. $7440
C. $10,140
D. $24,800
Direct Labor $6000 Direct Materials Used 3000 Direct Materials Purchased 9000 Cost of Goods Manufactured 13,000 Ending Work-in-Process Inventory 1400 Corporate Headquarters' Property taxes 900 Manufacturing Overhead Incurred 400Explanation / Answer
Dear student, only one question is allowed at a time. I am answering the first question
Where production is machine intensive, the overhead cost depends on number of machine hours worked and utilized for production. As the number of machine hours increases, overhead cost also increases. So, Machine hours is the most accurate cost driver of manufacturing overhead cost allocation in a machine-intensive production environment
So, as per above discussion, option A is the correct option
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